This Date in UCSF History: Single Payer Q&A
Originally published in Synapse on May 6, 1999. Medical student David Schab answers some of the most commonly raised questions about national health insurance.
Isn’t single payer socialized medicine? Wouldn’t there be less freedom of choice in such a system?
Socialized medicine is the salarying of healthcare providers who are employed by the government and whose practices are owned by the government, as in England.
Socialized medicine works with varying success in some countries, but American patients and physicians desire more freedom of choice than is feasible under a socialized medical system.
Single-payer is socialized medical insurance, not terribly different from Medicare. Of course, we have plenty of socialized services here, including police and fire protection, retirement income support (Social Security), the military, postal service, etc.
Greater freedom of choice for patients and freedom of practice for physicians would he available under a single payer system.
Canadian patients, for example, can go to any physician they choose, do not have to worry that their doctor will be enriched by the withholding of care, and have no deductibles, exclusions, or co-payments with which to be concerned.
In all other industrialized countries, physicians practice without subservience to lay case managers, are never gagged from discussing certain treatments with their patients, can freely refer their patients, and automatically get reimbursed without struggle with their payers.
Sounds great for physicians, but how about other health-care workers?
When pressure from private insurers trying to cut costs and generate profits for shareholders and CEOs arc eliminated, more money is available for care and nursing.
In Canada, there are more RNs per hospital bed, yet salaries are equal to those of American nurses.
Other Canadian health-care workers typically earn more than their American counterparts; notably, Canadian nursing homes pay their employees a third more than American ones.
And because the Canadian system is publicly funded, it is accountable to the public, not corporate taskmasters. Good care and nursing are a matter of public concern.
Are you really proposing to turn 15% of our economy over to the inefficient government?
At least in health insurance, government is significantly more efficient than private insurance.
Private insurers may spend more than 30% on administrative costs: salesmen’s and CEOs’ salaries, advertising, etc. Medicare spends only 3% on administration, and Canada’s system less than 1%.
American hospitals, beleaguered by multiple private and public payers, multiple billing protocols and computer systems, and the necessity of collecting co-payments from individuals, have, on average, 50 employees in their billing departments.
Canadian hospitals, which collect money from only one source, typically have one or two employees in the billing department. In addition, physicians lose a great deal of productivity in battling with private insurers’ lay case managers.
Consider the two basic approaches to controlling costs, as identified by Bodenheimer and Grumbach: “reins” and “fences” (Health Affairs, Winter 1990).
Is it more efficient to limit the land on which cattle can graze by putting reins and a shepherd on every cow, or rather to fence the pasture?
Is it more efficient to have a case manager review each and every service and referral, or to institute a financial fence, a global budget?
This “fence” around physicians as a whole would afford them broad latitude in clinical decision-making and would reduce financial incentives that interfere with clinical judgment.
Why should I care, since my employer pays for my health insurance?
Actually, as an employee, YOU pay for insurance.
Employers determine that they have a certain amount of money to spend on their employees, spend part of that for insurance, and distribute the rest to their employees.
Indeed, the linkage between health insurance and employment began because health insurance was the only kind of additional compensation available to employees during the wage freezes of World War II.
More money would be available for employee compensation if less were spent on health insurance.
Furthermore, almost all employer packages require co-payments; under a single payer system, all or nearly all co-payments and deductibles would be eliminated.
Wouldn’t single payer cost more than private insurance?
All respectable studies have found that under a single-payer system, healthcare costs would be reduced.
The nonpartisan General Accounting Office projects an administrative savings of 10% through the elimination of private insurance bills and administrative waste, or $100 billion in 1994.
This savings would pay for providing medical care to the 43 million Americans without any insurance and the 70 million who are underinsured.
Similarly, the nonpartisan Congressional Budget Office projects that single payer would reduce overall health costs by $225 billion by 2004, despite the expansion of comprehensive care to all Americans.
Private insurers, of course, oppose single payer, because private health insurance would be all but eliminated under a single payer system.
But if single payer is so much cheaper, why don’t other big corporations support it?
First, employers wield a great deal of power in linking employment to health insurance.
One is much less likely to leave a job if one’s own health, and even that of one’s family, is threatened by loss of a job.
Of course, fluidity of the labor market, so championed by free market advocates, is threatened by the linkage of employment lo health insurance.
Second, some have speculated that a simplification and centralization of billing and record-keeping would facilitate the collection and analysis of occupational health hazards; some employers may fear the repercussions of belter studies on occupational hazards than are currently available.
Third, large corporations are run by large boards whose members often sit on multiple boards. Private health insurers, whose business would be eliminated under a single payer system, often have controlling interests in firms that would otherwise benefit from single payer insurance.
Fourth, we may speculate that some corporations may fear a “creeping” phenomenon: Success in socializing health insurance could incite a movement to socialize other services.
Finally, it is worth mentioning that even some unions have been lukewarm about promoting national health insurance, because their appeal derives from their facility in negotiating for or providing health insurance lor their members.
Nevertheless, some large corporations, notably General Motors, have expressed interest in the savings lo be attained under a single-payer system.
How would this be financed?
One well-received proposal works as follows: Employers would pay a 7% payroll tax, eliminating premiums and the Medicare and Medicaid tax.
Families would pay a 2% income tax, replacing all other healthcare bills. For an average middle-income family, the total cost of health care would be approximately $731 annually, less than what most families already pay on top of their insurance!
What can I do?
Educate yourself and then spread the word! There are several contacts here at UCSF.